topic Non-Resident State Sales Tax Paid By The Partnership in Business & farm

Non-Resident State Sales Tax Paid By The Partnership

Anonymous — Mon, 23 Feb 2026 09:49:16 GMT

Our multi-member LLC located in Minnesota has (3) partners, (2) are non-resident, (1) is a resident. The state income taxes are paid by the partnership for the (2) non-residents, a check is written to the state to satisfy their MN income tax. My inclination is this payment on their behalf is a distribution and would reduce their capital position accordingly. So my question:

Is this payment of state income taxes to MN on behalf of the (2) non-resident partners also considered a partner distribution (reflected on their K-1)?

Re: Non-Resident State Sales Tax Paid By The Partnership

RobertB4444 — Sun, 29 Jan 2023 19:50:41 GMT

Yes, payments made on behalf of partners are considered distributions of capital and treated accordingly.

Check the IRS publication.

@Anonymous

Re: Non-Resident State Sales Tax Paid By The Partnership

Anonymous — Tue, 31 Jan 2023 22:16:52 GMT